1,000,000pc inflation to hit Venezuela in 2018, IMF says

Published:
July 24, 2018 15:00:52
| Updated:
July 26, 2018 18:06:13

A worker counts Venezuelan bolivar notes at a parking lot in Caracas, Venezuela on May 29. Reuters/File photo

Venezuela’s inflation rate is likely to top 1,000,000 per cent in 2018, an International Monetary Fund official wrote on Monday, putting it on track to become one of the worst hyperinflationary crises in modern history.

The South American nation’s economy has been steadily collapsing since the crash of oil prices in 2014 left it unable to maintain a socialist system of subsidies and price controls.

“We are projecting a surge in inflation to 1,000,000 per cent by end-2018 to signal that the situation in Venezuela is similar to that in Germany in 1923 or Zimbabwe in the late 2000’s,” Alejandro Werner, director of the IMF Western Hemisphere department, wrote in a post on the agency’s blog.

Venezuela’s Information Ministry did not immediately reply to a request for comment.

Consumer prices have risen 46,305 per cent this year, according to the opposition-run legislature, which began publishing its own inflation data in 2017 because the nation’s central bank had halted the release of basic economic data.

President Nicolas Maduro says the country is victim of an “economic war” waged by opposition businesses with the support of Washington.

His government routinely dismisses the IMF as a pawn of Washington that puts the interests of wealthy financiers before those of developing nations, reports Reuters.

Opposition critics have said Venezuela’s problems are the result of bad policy decisions, including unchecked expansion of the money supply and currency controls that leave businesses unable to import raw materials and machine parts.